Big White-Collar Prosecutions Dropping
An American Lawyer investigation of the Justice Department’s corporate fraud prosecutions shows a “precipitous decline” in major corporate fraud investigations since President Bush was re-elected.
The number of white-collar filings dropped 64 percent so far this year, compared to the same period last year. The magazine says it’s not clear whether the numbers reflect a drop in corporate fraud or simply a decline in the department’s emphasis on the problem.
At the same time that prosecutions dropped, so too did the Justice Department’s accounting of the cases. The department issued detailed reports in 2003 and 2004, but stopped issuing them the next year.
American Lawyer had to collect its own data, since the Justice Department did not supply much of the information sought. Attorney General Alberto Gonzales announced just before he stepped down that a Corporate Fraud Task Force formed in 2002 had obtained a record 1,236 corporate fraud convictions. But the department would not provide the magazine with a list of the cases.
The magazine studied 337 cases that resulted in convictions, and found that 76 percent were obtained through plea bargains. It also found 27 acquittals, 28 case dismissals, 22 mistrials and nine convictions overturned on appeal. Some of the prosecution failures were due to “questionable tactics by the Justice Department,” the magazine says.
The task force did not have a budget or prosecutors and relied on U.S. attorneys to prosecute cases. Some U.S. attorneys told the magazine that department lawyers pressed them to win convictions, but supplied little in the way of assistance.
In a related story, American Lawyer reports that white-collar criminals are often ordered to pay millions of dollars in restitution, but many will never be able to pay.
